Arcane pension loophole pays off for retiring Bellflower councilman

BELLFLOWER - Thanks to an arcane law, when Randy Bomgaars retires from the City Council on June 21, his pension will be more than three times his council salary.

Bomgaars - the city's longest-serving council member at 24 years - announced his resignation from the council at the end of Monday's meeting.

His council retirement will happen concurrently with his retirement from his 40-year teaching position with the Bellflower Unified School District.

By retiring from both jobs on the same day, Bomgaars, 61, is eligible under California law to apply his highest salary to both pensions.

Bomgaars has said this benefit is the reason for the double retirement, despite the fact that his current council term isn't up until March 2015.

He said his pension from the California State Teachers Retirement System is 2.4 percent of his highest annual salary, which was $82,000, for each year of service. At 40 years, that equates to 96 percent of his salary, or $78,720.

In Bellflower, his pension is 2 percent of his $12,723 council salary for each year of service. At 24 years, that equals 48 percent, or $6,107, bringing the total annual pension he would normally collect to $84,827.

However, a loophole in the law, which was amended in 1994, allows Bomgaars to apply his teacher's salary to his council pension - giving him

2 percent of $82,000 for each year of service, which at 24 years equals $39,360, or more than three times his council salary.

His total annual public pension will be about $118,080.

The city of Bellflower will have to pay Bomgaars' pension based on his teacher's salary.

Edd Fong, a spokesman with the California Public Employees Retirement System (CalPERS), said this benefit only applies to people who were elected to public office on or before 1994, the year in which the law that allowed that was amended. Bomgaars was elected in 1988.

"It's an arcane area that applies to very few people," Fong said. "The loophole was closed to prevent pension spiking."

Though public officials have been restricted from taking advantage of the benefit, anyone participating in more than one public pension system can still apply their highest salary to the other pensions when they retire, Fong said.

Fong didn't know when this pension plan became law.

"My understanding of the rationale behind this is the law didn't want to discourage people from switching to a better paying job and have their benefits from the previous job get frozen at that other salary."

Bomgaars said Tuesday that he only learned of the special benefit about nine months ago and recently decided to resign from the council, after he had won re-election.

In March 2011 he defeated four other candidates and came in third to keep one of three available council seats.

Bomgaars couldn't be reached for further comment Wednesday.

Critics of the state pension system say Bomgaars' retirement benefits show the need for change.

"This is bizarre," said Sherry Bebitch Jeffe, a senior fellow at the USC's Price School of Public Policy. "Are you entitled to a pension that does not reflect your salary? I don't think so.

"This exemplifies the need for pension reform. It's not illegal. Change the law."

The Bellflower council plans to discuss its options for filling Bomgaars' seat at its June 25 meeting.

City Manager Jeff Stewart said Tuesday that those options include appointing someone to the remainder of Bomgaars' term, holding a special election, or appointing someone until a special election is held, Stewart said.

The council has 60 days from Bomgaars' last day to make a decision.

A special election could be held in November or March, but Stewart said he doesn't know if it is logistically possible to still hold an election in November.

A special November election might cost up to $60,000. The cost of a special election in March would be minimal since a regular local election is already scheduled and all the logistics would be in place, he said.

However, Bomgaars said if the council wants to appoint him until a special election or asks him to finish his term, "I would be receptive to that."

If the council appoints him either way, Bomgaars would collect his council salary and his teacher's pension, but once he retires, he would collect the higher council pension based on his teacher's salary, CalPERS officials said.